Why Trump Might Hang Up on a Sprint/T-Mobile Merger After All

Renewed optimism about a deal taking place has propelled Sprint's stock, but chances might not be as high as many think.

Donald Trump's election has proved a boon for shareholders of Sprint (S) , on the premise that a Republican administration would be open to a merger of the carrier to T-Mobile USA (TMUS) . Regulators under Obama had pushed back against Sprint Chairman Masayoshi Son's goal of combining the U.S.'s third- and fourth-largest carriers.

While Sprint dropped nearly 1.9% to $7.35 on Friday, the stock is still up 17% since election day. Buzz about a possible merger with T-Mobile has given investors renewed confidence in the stock.

The incoming administration might not be predisposed to a wireless deal, however, BTIG LLC analyst Walt Piecyk suggested in a report. Citing the populist themes of the campaign, Piecyk assigns just a 20% probability of a deal passing under a Trump administration.

Trump advisor Stephen Bannon, a former Goldman Sachs (GS) banker, could fear that a merger and the arguments used to support it would not play well among grass roots supporters. "Analysts may use the standard labels of cost synergies and a "more rational pricing environment" but Bannon, an ex-banker, knows what those terms mean to his base," the analyst added.